ECO 1104 Chapter Notes - Chapter 7: Economic Surplus, Opportunity Cost, Economic Equilibrium
10 Apr 2017
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ECO 1104 Full Course Notes
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Chapter 7: consumers, producers, and the efficiency of markets. Cami: willingness to pay: the maximum amount that a buyer will pay for a good. To sell your album, you begin the bidding at a low price, say, . Because all four buyers are willing to pay much more, the price rises quickly. At this point, cami, anj, and pete have dropped out of the bidding because they are unwilling to bid any more than . Note that the album has gone to the buyer who values the album most highly: consumer surplus: a buyer"s willingness to pay minus the amount the buyer actually pays, demand curve to measure consumer surplus. : supply curve to measure producer surplus. Market efficiency: consumer surplus and producer surplus are basic tools that economists use to study the welfare of buyers and sellers in a market, these tools can help us address a fundamental economic question:
